Hologic, Inc. Q2 FY2025 earnings call

• Products deliver significant value to patients and customers, e.g., infectious disease and cancer tests help reduce healthcare costs. • Have a seasoned management team and highly engaged workforce. • Strong balance sheet and cash flows provide strategic and financial flexibility. • In diagnostics, molecular diagnostics grew, but Africa business was affected by funding cuts. • In breast health, reorganized sales team, refined end-of-life strategy for older gantries, and began selling Endomagnetics products directly. • In surgical, international business grew strongly and Gynesonics acquisition closed early in the quarter. • In skeletal, production ramp of DEXA system exceeded expectations.

Diagnostics business: Second quarter revenue was $453.6 million, growing 1.5% or 5.2% excluding COVID-related sales. Molecular diagnostics continued to lead growth. Breast health business: Revenue of $356.2 million declined 6.9% or 9.2% organically, excluding SSI and Endomagnetics. Surgical business: Second quarter revenue of $162.5 million increased 5.1% or 1.1% organically, excluding Gynesonics. Skeletal business: Second quarter revenue of $33 million grew 22.9%.

• Maintained full year revenue guidance of $4.05 billion to $4.10 billion. • Lowered non-GAAP EPS guidance range by $0.10, from $4.15 to $4.25. • Third quarter expected total revenues of $1.00 billion to $1.01 billion and non-GAAP EPS in the range of $1.04 to $1.07. • Tariffs related to Costa Rica and China will increase inventory acquisition costs by $20 million to $25 million per quarter. • Lowered China revenue forecast for the year by roughly $20 million.

• Geopolitical turbulence affecting growth in certain geographies like China and Africa. • Tariffs announced in early April and trade war in China increasing inventory acquisition costs. • Uncertainty in the geopolitical environment impacting financial forecast.

Q: Patrick Donnelly asked about the tariff backdrop, including potential higher costs from suppliers and mitigation efforts.

A: Steve MacMillan said they don't think it will dramatically affect, with offsets both ways and they are evaluating.

Q: Tejas Savant asked about revisiting premium price positioning for Envision and margin pressure.

A: Steve MacMillan said they feel confident in the value of the product and it includes standard software.

Q: Jack Meehan asked about China market and revenue.

A: Steve MacMillan said they are de-risking it, largely from the diagnostics business.

Q: Puneet Souda asked about supply chain management and gantry CapEx.

A: Steve MacMillan said they are evaluating supply chain, and feel good about the value of the gantry product.

Q: Vijay Kumar's questioner asked about replacement cycle of gantries.

A: Karleen Oberton said the average life of gantries has extended, and they expect steady placement going forward.